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GOVERNMENT

Gov. seeks
a connection with business

MAKING CONNECTIONS: From left, Henry “Bud” Violet, president of Ocean State Business Development Authority; Chris Cannata and Earl Queenan, both of the EDC, and Doug Hanson from BankNewport, at Gov. Lincoln D. Chafee’s recent community forum in Newport.

PBN PHOTO/CATIA CUEN

Posted:
Saturday, March 3, 2012 12:01 am

By Jill RodriguesContributing Writer

Rosemary S. Riley of Newport Insurance Agency had a complaint about the “quagmire” of navigating the state’s insurance-rate approval process.

For Kim McDonough, president of Advanced Pharmacy Concepts in North Kingstown, the challenge is participating as a small business in the bidding process for pieces of state projects.

And Addison Closson struck a nerve with just about everyone looking to catch the ear of Gov. Lincoln D. Chafee on Feb. 24 at the Community College of Rhode Island in Newport.

“Here we are in Newport. Hospitality is our thing here,” said Closson, who is in the permitting phase of starting up a ferry service in the city. “To add extra taxes on tickets and food and beverages, does it make a whole lot of sense?” Tourism-based taxes will hit every business in Newport, he said of the governor’s budget proposal to raise the meals and beverages tax paid by restaurant-goers from 8 to 10 percent.

“Why? That’s my question,” he said.

The CCRI event and one like it the day before in Woonsocket marked the second round of community forums Chafee has held across the state in an effort to connect to the business community and win support for his budget priorities.

The reaction from the business community so far has been mostly receptive.

“The governor considers the voice of small business to be important,” said Jody Sullivan, executive director of the Newport County Chamber of Commerce. “Businesses don’t vote. But business employees vote, and they need their jobs. The public is pretty sensitive to the challenges facing their employers.”

The forums are part of a strategy by Chafee to gain support for a budget plan that balances taxes, raising some and cutting others, as well as creating a more hospitable environment for business in the state, believes Wendy Schiller, associate professor of political science at Brown University.

“The point of these forums is to reconnect with business leaders in Rhode Island, who pretty much hear [about raising] taxes and turn off and tune out,” Schiller said. “He’s genuinely trying to reassert himself as governor and to put pressure on the state legislature” to pass his budget. To do that he needs the business community behind him, she said.

Chafee spoke at the Newport forum about his goals of creating “an equitable tax structure,” emphasizing the need to bring down property taxes. The state’s sales and income taxes are on par with the national average, if one takes into account the exemptions, he said. “But we are out of whack on property taxes. My strong view is that the greatest inhibitor to economic growth in the state is high property taxes.”

While some who attend the forums are interested in hearing more about broad policy issues Chafee and state lawmakers must reach agreement on, others attend to address individual concerns. The governor brought a host of state economic and regulatory officials to the Newport forum to take note of individual concerns of businesses.

Riley, for example, pressed for the simplification of the approval process for insurance rates and said they should be revised.

McDonough’s request on the bidding for state projects was straight-forward: “We’d like the opportunity for a chance to bid.”

Mark S. Hayward, Rhode Island district director of the U.S. Small Business Administration, said the SBA has been reaching out to state agencies with the request to make it possible for small businesses to bid on individual services.

Closson, who attended to learn more about obtaining the permits to get Aquidneck Ferry running, touched on a tax issue on the minds of many at the forum.

Earlier in the forum, Chafee said he would support lowering the meals and beverage tax proposal if the May state revenue figures improve over the current estimate. He encouraged those who oppose the tax increase to lobby legislators.

Sen. Louis DiPalma, D-Middletown, told forum attendees he has co-sponsored legislation in the Senate to block the proposed meals-tax increase.

Sullivan also promised that the Chamber will be gathering support from business owners to fight the meals-tax increase, as well as the sales tax on scenic tour and transportation services that took effect last October.

Many of those in attendance had the chance to meet with state officials for one-on-one discussions.

“What I really liked was the intimacy and the availability of having direct contact with the people running the state,” said Riley, who made a contact in the R.I. Department of Business Regulations to help address her concerns about insurance rates.

Closson too found the forum “really useful. I’m glad I know those resources are there. And I’m glad I got to stand up and ask the hard question, the elephant in the room [about taxes].”

McDonough had hoped for more discussion of regulation changes that will affect small business. She wasn’t interested in hearing about the financing help available from the state.

But she was surprised to learn that the state still offers an incentive reimbursement of 90 percent of a new employee’s wages for up to six months during on-the-job training. If she had known about that, she would have taken advantage of that when hiring recently, she said.

David Goldsmith, director of Aspiera Medical Ltd., said the recent forum in Woonsocket exceeded his expectations. He exchanged business cards with state officials and invited the governor to visit his business in Woonsocket.

“It was a great program,” Goldsmith said. “It showed that the governor and the [EDC] cared, and brought in all the key talent [from state agencies] … to hear from businesses, in terms of their challenges.”

Using such forums to garner public support worked for State Treasurer Gina M. Raimondo when she addressed pension reform, Schiller noted. It may work for Chafee too, if he revisits the communities in which he’s held forums to keep relationships with business leaders strong, she said.

Chafee had a community forum planned for March 2 in South Kingstown and another scheduled for this week in Hopkinton. A spokesman for the governor expects forums for businesses in other local communities will also be held.

Sullivan said the impact of the visit from the governor and state officials was felt in the business community.

“My impression was that it was a sincere effort on the governor’s part that they know it’s important to stay in touch with the business community, and that the state wants to know what’s helping or not helping,” she said. •

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